2025 saw the digital shift in enterprise technology with the emergence of a bold new era of ERP (Enterprise Resource Planning) systems. They are rapidly relocating from traditional server rooms to the cloud to accelerate the business’s performance and efficiency. As the era of cloud-native ERP dawns, enterprises cannot afford to lag behind.
A New Era for ERP: Cloud-First Gains Momentum
Forbes aptly captured the moment: “In 2025, the landscape of enterprise resource planning (ERP) is set for a thrilling transformation,” with cloud-native ERP solutions taking the lead.
This evolution is being driven by massive demand. As a result, the public cloud services market is expected to hit a staggering $723 billion in spending by the end of 2025. This is a clear indication of how many businesses are embracing cloud-based ERP.
Meanwhile, as data privacy and sovereignty concerns flare up, analysts such as Forrester encourage organisations to consider private cloud options as well. It helps them blend flexibility with control that will result in better planning of resources and faster delivery of outcomes.https://www.morganlewis.com/blogs/sourcingatmorganlewis/2025/05/the-latest-trends-in-moving-erp-systems-to-the-cloud
Navigating the Legal and Contractual Maze
Transitioning ERP systems is not merely about infrastructure! It is about getting the contracts right. To navigate their transition to cloud, companies must address:
- On-premise legacies: Should they be aware of how prepaid maintenance, license conversions, or claims tied to the old system will be handled after migration?
- Defining “use” and “access”: It is crucial to specify in agreements what constitutes proper access, whether it is by humans, bots, or AI systems. The costs and visibility tied to each shall also be specified.
- Ramp-up and ramp-down flexibility: Enterprises require contractual clarity on usage adjustments, price changes, and volume-based discounts.
- Control over updates: Since cloud vendors control upgrades, contracts must clarify how change management, service levels, and service-credit mechanisms work.
- Service delivery expectations: Documenting SLAs, outsourcing rules, AI capabilities, and enforceability, such as service credits, is essential.
- Renewal rights: Given rapid innovation and geopolitical uncertainty, businesses should secure control over renewal terms and pricing to avoid cost shocks.
Why It Matters for Businesses and IT Teams?
ERP systems are the foundation of enterprise operations, from finance to HR to supply chain. Their transition to the cloud brings agility, scalability, and access to real-time insights, but only if contracts are negotiated with foresight.
In areas like the UAE and MENA region, where regulatory landscapes and cross-border data flows are evolving fast, such detailed contract frameworks are even more vital. They ensure reliability, compliance, and budget management throughout the migration journey.
What to Do Next: A Practical Roadmap
- Audit legacy agreements: Identify prepaid services, license terms, and obligations tied to existing systems.
- Define usage clearly: Include bots, AI, and automation systems in your “access” definitions to avoid surprises.
- Build flexibility into pricing: Contracts should allow for future scaling, both growth and downsizing.
- Control updates: Negotiate how changes are managed, enforced, and compensated.
- Lock in renewal safeguards: Ensure continuation on fair terms amid changing market conditions.
As businesses in the UAE accelerate digital transformation, cloud ERP is more than an IT upgrade. It is a strategic lever that accelerates their performance and helps them reach their growth potential. Needless to say, it also brings complexity. With smart contracts that address both technology and change management, enterprises can harness the cloud’s full potential with confidence.